Trade pact at risk as Canada, US ties forever changed — business group

(FILES) The US and Canadian flags fly on the US side of the St. Clair River near the Bluewater Bridge border crossing between Sarnia, Ontario and Port Huron, Michigan on January 29, 2025. US President Donald Trump’s sweeping tariffs on Canada and Mexico are set to roil supply chains for products ranging from automobiles to avocados — with industries girding for cost increases. (Photo by Geoff Robins / AFP)

Ottawa, Canada — US President Donald Trump’s threats of punishing tariffs on Canadian imports has fundamentally altered trade ties between the neighbors, so much so that a North American free trade pact could be doomed, the head of a Canadian business council said Wednesday.

“Our economic relationship with the US is now, I believe, forever changed,” Candace Laing, the president of the Canadian Chamber of Commerce, told a panel discussion in Ottawa.

“Are we into a future where there might not be a North American economic bloc? Is there no longer a G7 economic bloc?” she wondered aloud.

The Chamber represents 200,000 Canadian businesses.

“We need to protect our economic security, (and) quite likely, our sovereignty,” Laing said, referring to Trump’s threats to annex Canada and make it the 51st US state.

Canada, the United States and Mexico are part of the USMCA continental trade pact, which has led to deep integration of their respective economies and supply chains.

Since taking office in January, Trump has thrown into doubt those ties, announcing — then pausing until March 4 — blanket tariffs on Canada and Mexico over illegal immigration and fentanyl smuggling.

Canada’s steel and aluminium industries are also bracing for tariffs on their products on March 12, and both Canada and Mexico could face additional reciprocal tariffs starting in April.

Canada and the United States trade more than $1 trillion in goods and services each year, according to government data.

Canadian officials are continuing to lobby the Trump administration to try to avoid the tariffs.

“Our mission is still to avoid the tariffs, extend the suspension if we need to and prepare in the case that there would be tariffs,” Industry Minister Francois-Philippe Champagne told reporters Wednesday.

He reminded also that Ottawa has vowed to hit back with tariffs on targeted US goods should talks fail and Trump follows through on his threats.

A Canadian government source has told AFP this would include duties on US steel products, ceramics like toilets and sinks, glassware and orange juice — in a first phase of tariffs that could be extended.